Referring to the events surrounding the collapse of FTX as “a handful of magic beans”, Massachusetts Senator Elizabeth Warren seemed to frame the “contagion” spreading through the crypto space as a partisan issue.

Speaking at a Senate Banking Committee nomination hearing on Nov. 30, Warren addressed committee counsel Jonathan McKernan, who confirmed that FTX’s bankruptcy had largely not affected traditional banking institutions in the United States. The Massachusetts senator, an outspoken skeptic of cryptocurrencies, used some of her time to applaud the work of Federal Deposit Insurance Corporation, or FDIC, acting chair Martin Gruenberg, who attended as part of his nomination to assume the position as part of a five-year term.

“Our banks stayed safe even as crypto imploded because many of President Biden's regulators, like acting chairman Gruenberg, fought to keep crypto from becoming dangerously intertwined with our banks,” said Warren. “He did this despite the Trump administration's and crypto boosters’ aggressive efforts to bring crypto and all its risks into traditional banking.”

Gruenberg responded in the affirmative to one of Warren’s questions in which she claimed the banking system would have been “less safe” had firms like FTX received similar insurance from the FDIC:

Warren went on to refer to crypto assets as “toxic” and unsuitable to integrate in traditional banking, claiming taxpayers could suffer the consequences. The senator was one of the lawmakers behind a Nov. 23 letter calling on the Justice Department to investigate the collapse of FTX and potentially prosecute individuals involved in wrongdoing, specifically naming former CEO Sam Bankman-Fried for his role in the controversy.

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